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China and India: Chini Hindi bhai bhai?

The new premier of China, Li Keqiang, chose India as the first country to visit in his first trip abroad. This is symbolically significant. The message is that China accords India a very high priority in its foreign policy. Good relations between China and India, two countries of continental size, with a combined population of over 2.5 billion and possessing two ancient and rich civilizations, is desirable and achievable. This is the second most important bilateral relationship in the world, exceeded only by the US-China relationship.

Historical Links

Most contemporary observers believe that the mighty Himalayan mountains constitute a natural barrier between China and India. As a result, there have been minimal interactions between their two peoples. This is historically wrong. In fact, as Amartya Sen has pointed out in his book, The Argumentative Indian, “intellectual links between China and India, stretching over much of the first millennium and beyond, were important in the history of the two countries”.

Buddhism and Mutual Learning

Buddhism played a central role in initiating the movement of people and ideas between the two countries. In the fifth century, the Buddhist monk, Faxian, spent a decade studying at Nalanda University in today’s state of Bihar. In the seventh century, an even more famous monk, Xuanzang, spent 17 years at Nalanda. In addition to Buddhism, China benefitted a great deal from India in science, mathematics, medicine, architecture, music and literature. In the eighth century, an Indian scientist, Gautama Siddhartha, (Qutan Xida) was appointed by the Chinese emperor as the President of the Board of Astronomy. It is wonderful that members of the East Asia Summit are building a new Nalanda University, with Amartya Sen as the head of its governing board and Singapore’s George Yeo and China’s Li Zaoxing, playing an active role in the initiative. The rebirth of Nalanda University reminds us that, 1,000 years ago, there was an Asian community and Asians were studying together and learning from one another. Our current efforts to form an Asian community therefore have ancient roots.

Positive Historical Legacy

There is therefore a positive historical legacy on relations between China and India. Skipping forward to the twentieth century, the contacts between them have been less substantive and significant. However, as Asad Latif has pointed out in his article, Sino-Indian ties: Looking back to the future (ST 30 May 2013), there were some positive exchanges. Latif recalled that a young Indian doctor, Dwarkanath Kotnis, volunteered to look after the communists in Yan’an and the Eighth Route Army and is celebrated in China as a hero. Acknowledging this link, Premier Li met with Kotnis’ relatives during his visit to Mumbai earlier this month. In 1928, Rabindranath Tagore established a Chinese Studies Institute at his school at Santiniketan.

1962 Border War

In 1962, however, China and India fought a brief border war. Although the victorious Chinese forces unilaterally withdrew from the territories they had occupied, Nehru felt humiliated and betrayed. Memories of that war continue to rancour in the hearts and minds of many of the Indian intelligentsia.

Sweet and Sour Relationship

What is the current state of relations between them? Do they share more convergent or divergent interests? Is a rising China a boon or a threat to India and vice versa? The current state of bilateral relations is both sweet and sour. There are both points of convergence and points of divergence.

Convergent Interests

China and India share the following convergent interests. First, the two economies are both competitive and complementary. China needs India’s exports of iron ore, cotton, other commodities, steel and other intermediate goods. India needs China’s exports of machinery, electronics goods and other manufactured products. India has a competitive edge over China in software, pharmaceuticals and services. China has an edge over India in manufacturing. There are many complementarities between the two economies.

Trade

Second, trade is booming between China and India. China has become India’s largest trading partner. The two-way trade has reached US$70 billion. The agreed target is US$100 billion by 2015. This is achievable as both economies are expanding in spite of the poor economic environment in the West and because they have started from a very low base and only recently.

Investment

Third, provided some political sensitivities can be removed or eased, there is tremendous scope for more Chinese investment in India and more Indian investment in China. At present, China has only invested US$278 million in India, ranking it number 30 on the list of India’s foreign investors. China has invested in India’s automobile, power, metallurgical, construction, and services industries. India has invested US$422 million in China, ranking it number 20 on India’s list of investment destinations. Leading companies from China and India, such as Huawei and Tata, respectively, are showing the way. Huawei currently employs 500 Indians in Bangalore and Tata employs 4,000 Chinese in 10 companies in China.

Cooperation in Multilateral Forums

Fourth, China and India share many common interests in international trade negotiations and climate change negotiations. China and India cooperate in many multilateral institutions, such as, the UN, WTO, G20 and BRICS. They see themselves as the champions of developing countries and of the emerging economies. I would like to see China and India joining the US and EU in protecting the freedom of navigation and defending the global commons.

Divergent Interests

China and India do, however, have many points of divergence. The following is a list of the most important: (i) border dispute; (ii) trade deficit; (iii) international rivers; (iv) Tibet and the Dalai Lama; (v) Pakistan; (vi) the so-called Chinese string of pearls; (vii) competition for natural resources; and (viii) deficit of trust. I will comment on what I consider to be the four most important issues.

Trust Deficit

First, there is a deficit of trust between Beijing and New Delhi. In the 2013 India Poll, conducted by the Lowy Institute and the Australia India Institute, it was revealed that 83% of the Indians polled perceive China as a security threat to India. Only 31% of Indians agree that China’s rise has been good for India. Because of the deficit of trust, each side tends to misinterpret the policies and actions of the other. For example, India regards the ports which China is building in Bangladesh, Myanmar, Sri Lanka and Pakistan, the so-called string of pearls, with suspicion. President Xi Jinping has recently proposed, as one of his five principles of co-existence between China and India, the strengthening of cultural ties and to increase mutual understanding and friendship between the two peoples. Increasing mutual understanding and reducing mutual distrust is an imperative.

Border Dispute

Second, the border dispute is largely a legacy of British imperialism. China claims the Indian state of Arunachal Pradesh as South-eastern Tibet. One of the most important temples of Tibetan Buddhism is located in Tawang, which is part of Arunachal Pradesh. India claims that China is occupying Indian territory in the Himalayan frontier, in the Ladakh region, called Aksai Chin. Any solution will require political will and compromise on both sides. Zhou Enlai and Deng Xiaoping had proposed one possible compromise. Prime Minister Manmohan Singh has recently stated, as one of his five principles, that India is willing to show accommodation on the border issue but that accommodation must take into account “ground realities”. I am confident that the border dispute can be solved when there is sufficient political will to do so in Beijing and New Delhi. I note that China has resolved all her land border disputes except those with India and Bhutan. I am heartened by the recent declaration of both countries not to allow these disputes affect their overall bilateral relations. The speedy resolution of a recent border standoff demonstrates the determination and desire of the leaders of the two countries to achieve this.

Water

Third, in Asia, unlike Europe, the upper riparian states and the lower riparian states do not have a culture of consultation and cooperation. India is concerned that the building of dams by China on the Yarlung Zangbo/Brahmaputra, will adversely affect those who live downstream. This is a legitimate concern. Asians should learn from the positive experience of Europe in this respect. For example, the 19 riparian states of the River Danube consult and cooperate with one another in the management and use of that river system. The same regime should apply to all the great river systems of Asia.

Trade Deficit

Fourth, the growing trade deficit suffered by India has become a political problem. India’s trade deficit with China has ballooned from US$9.38 billion in 2007 to US$28.87 billion in 2012. Premier Li Keqiang and PM Manmohan Singh have agreed to take energetic actions to increase Indian exports to China and to reduce the deficit. Indian companies should overcome their fear of China and establish themselves in China in order to take advantage of the booming Chinese market.

Rising Together

Can a rising China and a rising India live at peace with each other? I agree with Prime Minister Manmohan Singh and former Chinese Premier Wen Jiabao, when they said that the world is big enough to accommodate both. I also agree with Kishore Mahbubani who, in his book, The Great Convergence, wrote that: “Both China and India were entering into one of the most promising periods of civilizational rejuvenation. It would be sheer folly for China and India to waste this precious moment by engaging in a zero-sum geopolitical competition.” Relations between China and India in the 1950s were very good. Nehru had extended India’s hand of friendship to the People’s Republic of China, at a time when some in the West, were hostile to it. When Zhou Enlai visited New Delhi, he was greeted with banners proclaiming that, “Chini hindi bhai bhai”, meaning Chinese and Indians are brothers. I hope that one day in the near future that sense of brotherhood will return to the Sino-Indian relationship.

. . . . .

[1]The author is the co-chairman of the China-Singapore Forum and the India-Singapore Strategic Dialogue.

The Tembusu (Fagraea fragrans) is a large evergreen tree in the family Gentianaceae. It is native to Southeast Asia. Its trunk is dark brown, with deeply fissured bark, looking somewhat like a bittergourd. It grows in an irregular shape from 10 to 25m high. Its leaves are light green and oval in shape. Its yellowish flowers have a distinct fragrance and the fruits of the tree are bitter tasting red berries, which are eaten by birds and fruit bats.
Source: Tembusu, Wikipedia